(b) otherwise - 0.008 less any reduction made under subsection (2) for a previous day.

(4) This section affects the rate of a payment under this Act for a person if, and only if, section 198S affected that rate for the person.

198W Special rules for indexation of increased rate of disability pension on or after 20 March 2013

(1) A factor worked out under subsection 198(5) or 198D(5) for indexation of an amount provided for by an item of the table in subsection 27(1) on a day that is on or after 20 March 2013 is, for the purposes of that indexation, to be reduced by the brought forward CPI indexation amount, but not below 1.

Note: Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the factor.

Example: Assume that the factor worked out under subsection 198(5) on 20 March 2013 is 1.005. The brought forward CPI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That factor is reduced to 1 on 20 March 2013.

Further assume that on 20 September 2013 the factor worked out under subsection 198(5) is 1.010. The brought forward CPI indexation amount in relation to 20 September 2013 is 0.003. That factor is reduced to 1.007 on 20 September 2013.

The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the factor.

(2) In this section:

brought forward CPI indexation amount , in relation to a day, means 0.008 less any reduction made under subsection (1) for a previous day.

(3) This section affects the rate of a payment under this Act for a person if, and only if, section 198S affected that rate for the person.

Subdivision D - Increases in certain persons' service pension relating to 1 July 2011

198X Application of this Subdivision

(1) This Subdivision applies to a person if, on or after 1 July 2011:

(a) the person is receiving service pension; and

(b) the person is not a war widow/war widower-pensioner; and

(c) the person's pension supplement amount is more than the person's pension supplement basic amount.

(2) This Subdivision applies for purposes connected with the person's service pension on and after 1 July 2011 while he or she is not a war widow/war widower-pensioner.

Note: This Subdivision does not affect (directly or indirectly) on or after 1 July 2011:

(a) the rate of service pension of a war widow/war widower-pensioner; or

(b) the rate of anyone's income support supplement; or

(c) the minimum pension supplement amount of a person who is a war widow/war widower-pensioner.

198Y Increase of 1% on 1 July 2011

(1) This Act has effect as if, on 1 July 2011, the PS rate (within the meaning of section 59A) used to work out the person's pension supplement amount on and after that day were replaced by the PS rate needed for the person's pension supplement amount to be equal to the amount worked out by:

(a) adding the person's CPRS amount to what, apart from this section, would be the person's pension supplement amount on that day; and

(b) if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

(2) This Act has effect as if, on 1 July 2011, the PS minimum rate (within the meaning of section 59A) used to work out the person's minimum pension supplement amount on and after that day were replaced by the PS minimum rate needed for the person's minimum pension supplement amount to be equal to the amount worked out by:

(a) adding the person's CPRS amount to what, apart from this section, would be the person's minimum pension supplement amount on that day; and

(b) if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

(3) In this section:

CPRS amount , for a person, means the sum of the following amounts:

(a) 1% of the person's maximum basic rate worked out under point SCH6-B1 of Schedule 6;

(b) 1% of the person's pension supplement basic amount.

Note: The 1% increase includes the Carbon Pollution Reduction Scheme's estimated cost of living increase of 0.4% for the 2011-2012 financial year, which has been brought forward. Subsection 198Z(2), and the change to the indexation factor, and living cost indexation factor, on or after 20 March 2012 under section 198Z, take account of this brought forward increase.

198Z Special rules for indexation of some amounts on or after 20 March 2012

(1) An indexation factor worked out under section 59D for each indexation day on or after 20 March 2012 for each of the following:

(a) the person's maximum basic rate worked out under point SCH6-B1 of Schedule 6;

(b) the person's PS minimum rate (within the meaning of section 59A);

is to be reduced by the brought forward CPI indexation amount, but not below 1.

Note 1: The person's PS minimum rate is that rate as increased under subsection 198Y(2).

Note 2: Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the factor.

Example: Assume that the indexation factor worked out under section 59D on 20 March 2012 is 1.003. The brought forward CPI indexation amount in relation to 20 March 2012 is 0.004 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2012.

Further assume that on 20 September 2012 the indexation factor is 1.010. The brought forward CPI indexation amount in relation to 20 September 2012 is 0.001. That indexation factor is reduced to 1.009 on 20 September 2012.

The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the indexation factor.

(2) If the indexation factor worked out under section 59D for an indexation day is reduced under subsection (1), this Act has effect as if, on that day, the PS rate (within the meaning of section 59A) used to work out the person's pension supplement amount on and after that day were replaced by the PS rate needed for the person's pension supplement amount to be equal to the amount worked out as follows:

Method statement

Step 1. Work out the person's minimum pension supplement amount on that day.

Step 2. Work out what would, apart from subsection (1), be the person's minimum pension supplement amount on that day.

Step 3. Subtract the result of step 1 from the result of step 2.

Step 4. Subtract the result of step 3 from what would, apart from this subsection, be the person's pension supplement amount on that day.

Step 5. If the result of step 4 is not a multiple of $2.60, round the result up or down to the nearest multiple of $2.60 (rounding up if the result is a multiple of $1.30).

Note 1: The amount in step 1 is the amount worked out from the PS minimum rate (within the meaning of section 59A) as adjusted under subsection (1).

Note 2: The amount in step 2 is the amount worked out from the PS minimum rate as increased under subsection 198Y(2), and as indexed under section 59C, but without the adjustment under subsection (1) of this section.

Note 3: For step 4, the amount that would, apart from this subsection, be the person's pension supplement amount is the amount worked out from the PS rate (within the meaning of section 59A) as increased under subsection 198Y(1) and as indexed under section 59C.

(3) A living cost indexation factor, worked out under section 59EAB for each indexation day on or after 20 March 2012 for the person's maximum basic rate worked out under point SCH6-B1 of Schedule 6, is to be reduced by the brought forward PBLCI indexation amount, but not below 1.

Note: Once the brought forward PBLCI indexation amount becomes 0, there will be no further reduction of the factor.

Example: Assume that the living cost indexation factor worked out under section 59EAB on 20 March 2012 is 1.003. The brought forward PBLCI indexation amount in relation to 20 March 2012 is 0.004 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2012.

Further assume that on 20 September 2012 the living cost indexation factor is 1.010. The brought forward PBLCI indexation amount in relation to 20 September 2012 is 0.001. That indexation factor is reduced to 1.009 on 20 September 2012.

The brought forward PBLCI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the living cost indexation factor.

(4) In this section:

brought forward CPI indexation amount , in relation to a day, means:

(a) if the brought forward PBLCI indexation amount in relation to the day is 0 - 0; and

(b) otherwise - 0.004 less any reduction made under subsection (1) for a previous day.

brought forward PBLCI indexation amount , in relation to a day, means:

(a) if the brought forward CPI indexation amount in relation to the day is 0 - 0; and

(b) otherwise - 0.004 less any reduction made under subsection (3) for a previous day.

Subdivision E - Increases in certain persons' service pension relating to 1 July 2012

198ZA Application of this Subdivision

(1) This Subdivision applies to a person if, on or after 1 July 2012:

(a) the person is receiving service pension; and

(b) the person is not a war widow/war widower-pensioner; and

(c) the person's pension supplement amount is more than the person's pension supplement basic amount.

(2) This Subdivision applies for purposes connected with the person's service pension on and after 1 July 2012 while he or she is not a war widow/war widower-pensioner.

Note: This Subdivision does not affect (directly or indirectly) on or after 1 July 2012:

(a) the rate of service pension of a war widow/war widower-pensioner; or

(b) the rate of anyone's income support supplement; or

(c) the minimum pension supplement amount of a person who is a war widow/war widower-pensioner.

198ZB Increase of 1.8% on 1 July 2012

(1) This Act has effect as if, on 1 July 2012, the PS rate (within the meaning of section 59A) used to work out the person's pension supplement amount on and after that day were replaced by the PS rate needed for the person's pension supplement amount to be equal to the amount worked out by:

(a) adding the person's CPRS amount to what, apart from this section, would be the person's pension supplement amount on that day; and

(b) if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

(2) This Act has effect as if, on 1 July 2012, the PS minimum rate (within the meaning of section 59A) used to work out the person's minimum pension supplement amount on and after that day were replaced by the PS minimum rate needed for the person's minimum pension supplement amount to be equal to the amount worked out by:

(a) adding the person's CPRS amount to what, apart from this section, would be the person's minimum pension supplement amount on that day; and

(b) if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

(3) In this section:

CPRS amount , for a person, means the sum of the following amounts:

(a) 1.8% of the person's maximum basic rate worked out under point SCH6-B1 of Schedule 6;

(b) 1.8% of the person's pension supplement basic amount.

Note: The 1.8% increase includes the Carbon Pollution Reduction Scheme's estimated cost of living increase of 0.8% for the 2012-2013 financial year, which has also been brought forward. Subsection 198ZC(2), and the changes to the indexation factor and living cost indexation factor on or after 20 March 2013 under section 198ZC, take account of this 2nd brought forward increase.

198ZC Special rules for indexation of some amounts on or after 20 March 2013

(1) An indexation factor worked out under section 59D for each indexation day on or after 20 March 2013 for each of the following:

(a) the person's maximum basic rate worked out under point SCH6-B1 of Schedule 6;

(b) the person's PS minimum rate (within the meaning of section 59A);

is to be reduced by the brought forward CPI indexation amount, but not below 1.

Note 1: The person's PS minimum rate is that rate as increased undersubsection 198ZB(2).

Note 2: Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the factor.

Example: Assume that the indexation factor worked out under section 59D on 20 March 2013 is 1.005. The brought forward CPI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2013.

Further assume that on 20 September 2013 the indexation factor is 1.010. The brought forward CPI indexation amount in relation to 20 September 2013 is 0.003. That indexation factor is reduced to 1.007 on 20 September 2013.

The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the indexation factor.

(2) If the indexation factor worked out under section 59D for an indexation day is reduced under subsection (1), this Act has effect as if, on that day, the PS rate (within the meaning of section 59A) used to work out the person's pension supplement amount on and after that day were replaced by the PS rate needed for the person's pension supplement amount to be equal to the amount worked out as follows:

Method statement

Step 1. Work out the person's minimum pension supplement amount on that day.

Step 2. Work out what would, apart from subsection (1), be the person's minimum pension supplement amount on that day.

Step 3. Subtract the result of step 1 from the result of step 2.

Step 4. Subtract the result of step 3 from what would, apart from this subsection, be the person's pension supplement amount on that day.

Step 5. If the result of step 4 is not a multiple of $2.60, round the result up or down to the nearest multiple of $2.60 (rounding up if the result is a multiple of $1.30).

Note 1: The amount in step 1 is the amount worked out from the PS minimum rate as adjusted under subsection (1).

Note 2: The amount in step 2 is the amount worked out from the PS minimum rate as increased under subsection 198ZB(2), and as indexed under section 59C, but without the adjustment under subsection (1) of this section.

Note 3: For step 4, the amount that would, apart from this subsection, be the person's pension supplement amount is the amount worked out from the PS rate as increased under subsection 198ZB(1) and as indexed under section 59C.

(3) A living cost indexation factor, worked out under section 59EAB for each indexation day on or after 20 March 2013 for the person's maximum basic rate worked out under point SCH6-B1 of Schedule 6, is to be reduced by the brought forward PBLCI indexation amount, but not below 1.

Note: Once the brought forward PBLCI indexation amount becomes 0, there will be no further reduction of the factor.

Example: Assume that the living cost indexation factor worked out under section 59EAB on 20 March 2013 is 1.005. The brought forward PBLCI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2013.

Further assume that on 20 September 2013 the living cost indexation factor is 1.010. The brought forward PBLCI indexation amount in relation to 20 September 2013 is 0.003. That indexation factor is reduced to 1.007 on 20 September 2013.

The brought forward PBLCI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the living cost indexation factor.

(4) In this section:

brought forward CPI indexation amount , in relation to a day, means:

(a) if the brought forward PBLCI indexation amount in relation to the day is 0 - 0; and

(b) otherwise - 0.008 less any reduction made under subsection (1) for a previous day.

brought forward PBLCI indexation amount , in relation to a day, means:

(a) if the brought forward CPI indexation amount in relation to the day is 0 - 0; and

(b) otherwise - 0.008 less any reduction made under subsection (3) for a previous day.

Subdivision F - Increases in pension payable to war widow/war widower-pensioners

198ZD Increase of 1% on 1 July 2011

This Act has effect as if, on 1 July 2011:

(a) the amount specified in paragraph 30(1)(b) were increased by 1% of the sum of:

(i) the amount worked out under paragraph 30(1)(a) on that day; and

(ii) the amount specified in paragraph 30(1)(b) on that day apart from this section; and

(iii) the amount specified in paragraph 30(1)(c) on that day; and

(b) if the amount resulting from paragraph (a) is not a multiple of $0.10, rounding the amount up or down to the nearest multiple of $0.10 (rounding up if the amount is a multiple of $0.05).

Note: The 1% increase includes the Carbon Pollution Reduction Scheme's estimated cost of living increase of 0.4% for the 2011-2012 financial year, which has been brought forward. The changes to the indexation factors on or after 20 March 2012 under section 198ZE take account of this brought forward increase.

198ZE Adjustment of indexation on and after 20 March 2012

(1) An indexation factor that:

(a) is worked out under section 59D for indexation on a day that is on or after 20 March 2012; and

(b) is (indirectly) relevant to the indexation of the amount specified in paragraph 30(1)(b);

is, for the purposes of the indexation of the amount on that day, to be reduced by the brought forward CPI indexation amount, but not below 1.

Note 1: An indexation factor worked out under section 59D is (indirectly) relevant to the indexation of an amount specified in paragraph 30(1)(b). This is because:

(a) section 198 provides for indexation of the amount by reference to the pension MBR factor worked out under section 59LA; and

(b) the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the indexation factor worked out under section 59D.

Note 2: The indexation of an amount specified in paragraph 30(1)(b) on that day depends on a pension MBR factor that is worked out on the basis of the indexation factor worked out under section 59D and reduced under this section.

Note 3: Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the indexation factor.

Example: Assume that the indexation factor worked out under section 59D on 20 March 2012 is 1.003. The brought forward CPI indexation amount in relation to 20 March 2012 is 0.004 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2012.

Further assume that on 20 September 2012 the indexation factor worked out under section 59D is 1.010. The brought forward CPI indexation amount in relation to 20 September 2012 is 0.001. That indexation factor is reduced to 1.009 on 20 September 2012.

The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the indexation factor.

(2) A living cost indexation factor that:

(a) is worked out under section 59EAB for indexation on a day that is on or after 20 March 2012; and

(b) is (indirectly) relevant to the indexation of the amount specified in paragraph 30(1)(b);

is, for the purposes of the indexation of the amount on that day, to be reduced by the brought forward PBLCI indexation amount, but not below 1.

Note 1: A factor worked out under section 59EAB is (indirectly) relevant to the indexation of an amount specified in paragraph 30(1)(b). This is because:

(a) section 198 provides for indexation of the amount by reference to the pension MBR factor worked out under section 59LA; and

(b) the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the factor worked out under section 59EAB.

Note 2: The indexation of an amount specified in paragraph 30(1)(b) on that day depends on a pension MBR factor that is worked out on the basis of the factor worked out under section 59EAB and reduced under this section.

Note 3: Once the brought forward PBLCI indexation amount becomes 0, there will be no further reduction of the factor.

Example: Assume that the living cost indexation factor worked out under section 59EAB on 20 March 2012 is 1.003. The brought forward PBLCI indexation amount in relation to 20 March 2012 is 0.004 (as there has been no previous reduction). That living cost indexation factor is reduced to 1 on 20 March 2012.

Further assume that on 20 September 2012 the living cost indexation factor is 1.010. The brought forward PBLCI indexation amount in relation to 20 September 2012 is 0.001. That living cost indexation factor is reduced to 1.009 on 20 September 2012.

The brought forward PBLCI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the living cost indexation factor.

(3) In this section:

brought forward CPI indexation amount , in relation to a day, means:

(a) if the brought forward PBLCI indexation amount in relation to the day is 0 - 0; and

(b) otherwise - 0.004 less any reduction made under subsection (1) for a previous day.

brought forward PBLCI indexation amount , in relation to a day, means:

(a) if the brought forward CPI indexation amount in relation to the day is 0 - 0; and

(b) otherwise - 0.004 less any reduction made under subsection (2) for a previous day.

(4) This section affects the rate of a payment under this Act for a person if, and only if, section 198ZD affected that rate for the person.

198ZF Increase of 1.8% on 1 July 2012

This Act has effect as if, on 1 July 2012:

(a) the amount specified in paragraph 30(1)(b) were increased by 1.8% of the sum of:

(i) the amount worked out under paragraph 30(1)(a) on that day; and

(ii) the amount specified in paragraph 30(1)(b) on that day apart from this section; and

(iii) the amount specified in paragraph 30(1)(c) on that day; and

(b) if the amount resulting from paragraph (a) is not a multiple of $0.10, rounding the amount up or down to the nearest multiple of $0.10 (rounding up if the amount is a multiple of $0.05).

Note: The 1.8% increase includes the Carbon Pollution Reduction Scheme's estimated cost of living increase of 0.8% for the 2012-2013 financial year, which has also been brought forward. The changes to the indexation factors on or after 20 March 2013 under section 198ZG take account of this 2nd brought forward increase.

198ZG Adjustment of indexation on and after 20 March 2013

(1) An indexation factor that:

(a) is worked out under section 59D for indexation on a day that is on or after 20 March 2013; and

(b) is (indirectly) relevant to the indexation of the amount specified in paragraph 30(1)(b);

is, for the purposes of the indexation of the amount on that day, to be reduced by the brought forward CPI indexation amount, but not below 1.

Note 1: An indexation factor worked out under section 59D is (indirectly) relevant to the indexation of an amount specified in paragraph 30(1)(b). This is because:

(a) section 198 provides for indexation of the amount by reference to the pension MBR factor worked out under section 59LA; and

(b) the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the indexation factor worked out under section 59D.

Note 2: The indexation of an amount specified in paragraph 30(1)(b) on that day depends on a pension MBR factor that is worked out on the basis of the indexation factor worked out under section 59D and reduced under this section.

Note 3: Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the indexation factor.

Example: Assume that the indexation factor worked out under section 59D on 20 March 2013 is 1.005. The brought forward CPI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2013.

Further assume that on 20 September 2013 the indexation factor worked out under section 59D is 1.010. The brought forward CPI indexation amount in relation to 20 September 2013 is 0.003. That indexation factor is reduced to 1.007 on 20 September 2013.

The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the indexation factor.

(2) A living cost indexation factor that:

(a) is worked out under section 59EAB for indexation on a day that is on or after 20 March 2013; and

(b) is (indirectly) relevant to the indexation of the amount specified in paragraph 30(1)(b);

is, for the purposes of the indexation of the amount on that day, to be reduced by the brought forward PBLCI indexationamount, but not below 1.

Note 1: A living cost indexation factor worked out under section 59EAB is (indirectly) relevant to the indexation of an amount specified in paragraph 30(1)(b). This is because:

(a) section 198 provides for indexation of the amount by reference to the pension MBR factor worked out under section 59LA; and

(b) the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the living cost indexation factor worked out under section 59EAB.

Note 2: The indexation of an amount specified in paragraph 30(1)(b) on that day depends on a pension MBR factor that is worked out on the basis of the living cost indexation factor worked out under section 59EAB and reduced under this section.

Note 3: Once the brought forward PBLCI indexation amount becomes 0, there will be no further reduction of the living cost indexation factor.

Example: Assume that the living cost indexation factor worked out under section 59EAB on 20 March 2013 is 1.005. The brought forward PBLCI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That living cost indexation factor is reduced to 1 on 20 March 2013.

Further assume that on 20 September 2013 the living cost indexation factor is 1.010. The brought forward PBLCI indexation amount in relation to 20 September 2013 is 0.003. That living cost indexation factor is reduced to 1.007 on 20 September 2013.

The brought forward PBLCI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the living cost indexation factor.

(3) In this section:

brought forward CPI indexation amount , in relation to a day, means:

(a) if the brought forward PBLCI indexation amount in relation to the day is 0 - 0; and

(b) otherwise - 0.008 less any reduction made under subsection (1) for a previous day.

brought forward PBLCI indexation amount , in relation to a day, means:

(a) if the brought forward CPI indexation amount in relation to the day is 0 - 0; and

(b) otherwise - 0.008 less any reduction made under subsection (2) for a previous day.

(4) This section affects the rate of a payment under this Act for a person if, and only if, section 198ZF affected that rate for the person.

2   After clause 34 of Schedule 5

Insert:

34A Increases in rates payable under clause 30 related to Carbon Pollution Reduction Scheme

Application

(1) This clause applies if:

(a) clause 30 affects the rate at which service pension is payable to a person for a day on or after 1 July 2011; and

(b) subclause 31(1) or (2) is relevant to the person; and

(c) Subdivision D or E of Division 5 of Part XII applies to the person.

Purpose

(2) The purpose of this clause is to ensure appropriate increases in the rate of the person's service pension (as affected by clause 30 and while the person is not a war widow/war widower-pensioner) on account of the Carbon Pollution Reduction Scheme's estimated cost of living increase, by:

(a) providing for increases in the amount described in subparagraph 30(4)(a)(i) of this Schedule; and

(b) modifying the operation of Subdivisions D and E of Division 5 of Part XII (which apply because of clause 34).

Increase on 1 July 2011

(3) If Subdivision D of Division 5 of Part XII applies to the person, this Act has effect as if, on 1 July 2011, the amount described in subparagraph 30(4)(a)(i) of this Schedule (apart from this subclause) for the person were replaced by the amount worked out by:

(a) adding the CPRS amount defined in subsection 198Y(3) for the person (worked out disregarding clause 34) to the amount described in subparagraph 30(4)(a)(i) of this Schedule on that day (apart from this subclause); and

(b) if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

Increase on 1 July 2012

(4) If Subdivision E of Division 5 of Part XII applies to the person, this Act has effect as if, on 1 July 2012, the amount described in subparagraph 30(4)(a)(i) of this Schedule (apart from this subclause) for the person were replaced by the amount worked out by:

(a) adding the CPRS amount defined in subsection 198ZB(3) for the person (worked out disregarding clause 34) to the amount described in subparagraph 30(4)(a)(i) of this Schedule on that day (apart from this subclause); and

(b) if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

Modification of Division 5 of Part XII

(5) Subsections 198Z(1) and 198ZC(1), and the definition of brought forward CPI indexation amount (except paragraph (a) of that definition) in each of subsections 198Z(4) and 198ZC(4), apply in relation to the amount described in subparagraph 30(4)(a)(i) of this Schedule for the person in the same way as they apply in relation to the person's PS minimum rate.

(6) Subsections 198Z(2) and 198ZC(2) apply as if each reference in those subsections to the PS rate were a reference to the amount described in subparagraph 30(4)(a)(i) of this Schedule for the person.

Note: The reference in step 4 of the method statement in each of subsections 198Z(2) and 198ZC(2), as they apply because of this clause, to what would, apart from that subsection, be the person's pension supplement amount is a reference to that amount worked out taking account of clause 34. Note 3 to each of those subsections is not relevant to the application of those subsections because of this clause.

(7) The following provisions do not affect the rate of the person's service pension worked out under clause 30 or an amount worked out in relation to the person's pension because of clause 34:

(a) subsection 198Y(1);

(b) paragraph 198Z(1)(a);

(c) subsection 198Z(3);

(d) subsection 198ZB(1);

(e) paragraph 198ZC(1)(a);

(f) subsection 198ZC(3).

Part 2   Related amendments

Veterans' Entitlements Act 1986

3   At the end of subsection 59D(3)

Add:

Note: On and after 20 March 2012, the factor may be reduced by section 198T, 198U, 198Z or 198ZE for some purposes. On and after 20 March 2013, the factor may be reduced by section 198V, 198W, 198ZC or 198ZG for some purposes.

4   At the end of subsection 59EAB(1)

Add:

Note: On and after 20 March 2012, the factor may be reduced by section 198T, 198Z or 198ZE for some purposes. On and after 20 March 2013, the factor may be reduced by section 198V, 198ZC or 198ZG for some purposes.

5   Subsection 198(5) (note)

Repeal the note, substitute:

Note: On and after 20 March 2012, the factor may be reduced by section 198U for some purposes. On and after 20 March 2013, the factor may be reduced by section 198W for some purposes.

6   Subsection 198D(5) (note)

Repeal the note, substitute:

Note: On and after 20 March 2012, the factor may be reduced by section 198U for some purposes. On and after 20 March 2013, the factor may be reduced by section 198W for some purposes.

Schedule 6   Income tests

Part 1   Taper rate

Veterans' Entitlements Act 1986

1   Point SCH6-C14B of Schedule 6 (method statement, step 6)

Omit "0.4", substitute "0.5".

2   Subpoint SCH6-E11(1) of Schedule 6 (formula)

Omit "0.4", substitute "0.5".

Part 2   Income free area

Division 1   Main amendments

Veterans' Entitlements Act 1986

3   Subsection 53E(2)

Omit "plus (if the veteran has a dependent child or dependent children) the amount in, or worked out in accordance with, column 5 of that item for each dependent child".

4   Subsection 53E(2) (table 53E, columns 5 and 6)

Repeal the columns.

5   Subsection 53E(2) (note 2)

Repeal the note.

6   Subsection 53E(2A)

Repeal the subsection.

7   Point SCH6-E2 of Schedule 6 (method statement, step 2)

Omit "points SCH6-E6 to SCH6-E10", substitute "point SCH6-E6".

8   Point SCH6-E6 of Schedule 6

Omit "plus an additional corresponding amount in column 5 for each dependent child of the person".

9   Point SCH6-E6 of Schedule 6 (table E-1, columns 5 and 6)

Repeal the columns.

10   Point SCH6-E6 of Schedule 6 (note 2)

Repeal the note.

11   Points SCH6-E7, SCH6-E8, SCH6-E9, SCH6-E10 and SCH6-E12 of Schedule 6

Repeal the points.

Division 2   Consequential amendments

Veterans' Entitlements Act 1986

12   Subsection 59B(1) (table item 10)

Repeal the item.

13   Subsection 59C(2) (method statement, step 3)

Omit " initial indexed amount ", substitute " provisional indexed amount ".

14   Subsection 59C(2) (method statement, step 4)

Repeal the step.

15   Subsection 59C(2AA)

Repeal the subsection.

16   Subsection 59E(1) (note 1)

Omit "step 4", substitute "step 3".

17   Subclause 3(3) of Schedule 6 (example)

Repeal the example, substitute:

Example: Point SCH6-E2 is the 2nd point in Module E of the Rate Calculator in this Schedule.

Part 3   Application of amendments

18   Amendments of the Veterans' Entitlements Act 1986

The amendments of the Veterans' Entitlements Act 1986 made by this Schedule apply for the purposes of working out the rates of payments under that Act for days on or after 20 September 2009.

Schedule 7   Work bonus

Veterans' Entitlements Act 1986

1   Section 46 (note 2)

After "see", insert "section 46AA (work bonus),".

2   After Division 1 of Part IIIB

Insert:

Division 1A - Work bonus

46AA Income concession

(1) This section applies to a person if:

(a) the person's rate of service pension or income support supplement is calculated in accordance with the Rate Calculator; and

(b) the person has reached qualifying age.

Note: For qualifying age see section 5Q.

(2) If the person's employment income for a pension period is greater than or equal to the income concession amount for that period, the amount of the person's employment income to be disregarded for that period for the purposes of Module E of that Rate Calculator is 50% of that income concession amount.

Note: For employment income see section 46AB.

(3) If a person's employment income for a pension period is less than the income concession amount for that period, the amount of the person's employment income to be disregarded for that period for the purposes of Module E of that Rate Calculator is 50% of the person's employment income for that period.

Definition

(4) The income concession amount is $500.

Interpretation

(5) To avoid doubt, apply this section before applying Point SCH6-E3 of Schedule 6.

Example 1: David and Amy are members of a couple. David earns $50 of employment income in a pension period and Amy earns $500 of employment income in that period.

For David, $25 of the $50 is disregarded for the purposes of the ordinary/adjusted income test.

For Amy, $250 of the $500 is disregarded for the purposes of the ordinary/adjusted income test.

Example 2: Ian and Simone are members of a couple. Ian earns no employment income in a pension period and Simone earns $1,000 of employment income in that period.

For Simone, $250 is disregarded for the purposes of the ordinary/adjusted income test (which is 50% of the income concession amount).

(6) If:

(a) apart from this subsection, an amount (the initial amount ) would be disregarded under subsection (2) or (3) in relation to a person and a pension period; and

(b) an amount is worked out under subsection 115G(1) or (2) in relation to that person and that period, and that amount is greater than or equal to the initial amount;

then subsection (2) or (3) of this section, as the case may be, does not apply in relation to that person and that period.

46AB Meaning of employment income

(1) For the purposes of section 46AA, employment income , in relation to a person, is ordinary income of the person:

(a) that is earned, derived or received, or that is taken to have been earned, derived or received, by the person from remunerative work undertaken by the person as an employee in an employer/employee relationship; and

(b) that includes, but is not limited to, salary, wages, commissions and employment-related fringe benefits that are so earned, derived or received or taken to have been so earned, derived or received;

but does not include:

(c) a superannuation payment to the person; or

(d) a payment of compensation, or a payment to the person under an insurance scheme, in relation to the person's inability to earn, derive or receive income from that remunerative work; or

(e) a leave payment to the person; or

(f) a payment to the person by a former employer of the person in relation to the termination of the person's employment; or

(g) a comparable foreign pension.

(2) For the purposes of paragraph (1)(e), a leave payment:

(a) includes a payment in respect of sick leave, annual leave, maternity leave or long service leave; and

(b) may be made as a lump sum payment, a payment that is one of a series of regular payments or otherwise; and

(c) is taken to be made to a person if it is made to another person:

(i) at the direction of the person or of a court; or

(ii) on behalf of the person; or

(iii) for the benefit of the person; or

(iv) if the person waives or assigns his or her right to the payment.

3   At the end of section 115G

Add:

(4) If:

(a) an amount (the initial amount ) is worked out under subsection (1) or (2) in respect of a veteran and a pension period; and

(b) an amount is disregarded under subsection 46AA(2) or (3) in relation to that veteran and that period, and that amount is greater than or equal to the initial amount;

then subsection (1) or (2) of this section, as the case may be, does not apply in relation to that veteran and that period.

4   Point SCH6-E2 of Schedule 6 (method statement, step 6, after paragraph (a) of note 2)

Insert:

(aa) the work bonus (section 46AA);

5   Application

The amendment made by item 2 applies in respect of a pension period that includes 20 September 2009 and later pension periods.

Schedule 8   Pension bonus scheme

Veterans' Entitlements Act 1986

1   After subsection 45TI(1)

Insert:

(1A) However, the Commission must not register a person as a member of the pension bonus scheme if the person's special date of eligibility for a designated pension occurs on or after 20 September 2009.

(1B) For the purposes of subsection (1A), if a person would otherwise have 2 or more special dates of eligibility for a designated pension, only the first date is to be counted.

2   Application

The amendment made by item 1 applies in relation to applications for registration that are made on or after the commencement of that item.

Schedule 9   Transitional arrangements

Part 1   Main amendment

Veterans' Entitlements Act 1986

1   At the end of Schedule 5

Add:

Part 5 - Transitional provisions: changes on 20 September 2009

30 Transitional rates of service pension and income support supplement on and after 20 September 2009

Application

(1) This clause applies if:

(a) on 19 September 2009 a person was receiving one of the following payments:

(i) service pension or income support supplement;

(ii) age pension, disability support pension, wife pension, carer payment, bereavement allowance, widow B pension or special needs pension under the Social Security Act; and

(b) the person continues (without a break) to receive one of those payments (whether or not of the same sort as the one the person received on that day).

Purpose

(2) This clause has effect for the purposes of working out the rate of service pension or income support supplement under this Act for the person for a day (the relevant day ) after 19 September 2009 under subpoint SCH6-A1(2), (3), (4) or (6).

Note: This clause does not make a person entitled to receive service pension or income support supplement if the person is not otherwise entitled to receive it.

Provisional payment rate for service pension

(3) For working out the person's rate of service pension, the person's provisional payment rate is taken to be the amount worked out under subclause (4) if that amount is greater than the person's provisional payment rate (for that purpose) apart from this clause.

Note: The provisional payment rate is an amount worked out under the method statement in subpoint SCH6-A1(2). That subpoint may be relevant of its own force or because of subpoint SCH6-A1(3) or (4).

(4) The amount is the one that would be the provisional payment rate under subpoint SCH6-A1(2) if:

(a) the maximum payment rate under that subpoint for the person were the total of:

(i) the amount worked out under whichever of subclauses 31(1), (2), (3) and (4) is relevant to the person; and

(ii) the amount (if any) per year calculated for the person under Module C of the Rate Calculator (for rent assistance);

reduced, if subclause 31(1) or (2) is relevant to the person and an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, by the person's minimum pension supplement amount; and

(b) the amendments made by Schedules 6 and 7 to the Veterans' Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been made.

Note 1: The maximum payment rate is an amount used in subpoint SCH6-A1(2).

Note 2: Subclause 31(1) deals with a person in Australia who is not a member of a couple or is a member of an illness separated couple or respite care couple.

Note 3: Subclause 31(2) deals with a person in Australia who is a member of a couple (but not a member of an illness separated couple or respite care couple).

Note 4: Subclause 31(3) deals with a person who has been outside Australia for more than 13 weeks and is not a member of a couple or is a member of an illness separated couple or respite care couple.

Note 5: Subclause 31(4) deals with a person who has been outside Australia for more than 13 weeks and is a member of a couple (but not a member of an illness separated couple or respite care couple).

Note 6: The amount described in subparagraph (4)(a)(i) is indexed under Subdivision B (CPI indexation) of Division 18 of Part IIIB on and after 20 March 2010.

Provisional payment rate for income support supplement

(5) For working out the person's rate of income support supplement, the person's provisional payment rate is taken to be the amount worked out under subclause (6) if that amount is greater than the person's provisional payment rate (for that purpose) apart from this clause.

Note: The provisional payment rate is an amount worked out under the method statement in subpoint SCH6-A1(6).

(6) The amount is the one that would be the provisional payment rate under subpoint SCH6-A1(6) if:

(a) the maximum payment rate under that subpoint for the person were the total of:

(i) the amount worked out under whichever of subclauses 32(1) and (2) is relevant to the person; and

(ii) the amount (if any) per year calculated for the person under Module C of the Rate Calculator (for rent assistance); and

reduced, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, by the person's minimum pension supplement amount; and

(b) the amendments made by Schedules 6 and 7 to the Veterans' Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been made; and

(c) the increased rate were the amount worked out under subclause 32(3).

Note 1: The maximum payment rate and increased rate are amounts used in subpoint SCH6-A1(6).

Note 2: Subclause 32(1) deals with a person who is not a member of a couple or is a member of an illness separated couple or respite care couple.

Note 3: Subclause 32(2) deals with a person who is a member of a couple (but not a member of an illness separated couple or respite care couple).

Note 4: The amount described in subparagraph (6)(a)(i) is indexed under Subdivision B (CPI indexation) of Division 18 of Part IIIB on and after 20 March 2010.

Note 5: The amount described in paragraph (6)(c) is affected by indexation because the components of that amount are indexed.

Limit on application of subclauses (3) and (5)

(7) Neither subclause (3) nor subclause (5) applies for working out the rate of service pension or income support supplement of the person for the relevant day if the relevant day is after a day for which one of the following conditions was met:

(a) the amount worked out for the day under subclause (4) (in a previous application of this clause) was less than or equal to the person's provisional payment rate for service pension apart from this clause;

(b) the amount worked out for the day under subclause (6) (in a previous application of this clause) was less than or equal to the person's provisional payment rate for income support supplement apart from this clause;

(c) the amount worked out for the day under subclause 146(4) of Schedule 1A to the Social Security Act was less than or equal to the person's provisional annual payment rate, apart from clause 146 of that Schedule, for a social security pension described in that clause.

(8) However, subclause (7) does not prevent subclause (3) or (5) from applying for working out the rate of service pension or income support supplement of the person for the relevant day if:

(a) on the relevant day the person is a member of a couple, but not a member of an illness separated couple or respite care couple; and

(b) on each day for which a condition in paragraph (7)(a), (b) or (c) was met, the person was a member of a respite care couple; and

(c) on a day before all the days described in paragraph (b):

(i) the person was a member of a couple, but not a member of an illness separated couple or respite care couple, and not partnered (partner in gaol) within the meaning of the Social Security Act; and

(ii) either this clause affected the rate at which service pension or income support supplement was payable to the person or clause 146 of Schedule 1A to the Social Security Act affected the rate at which a social security pension described in that clause was payable to the person.

Note: For member of a couple , illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.

31 Amounts affecting transitional rate of service pension

Single Australian resident in Australia

(1) For the purposes of subparagraph 30(4)(a)(i), work out the amount as follows if, on the relevant day:

(a) the person's family situation is any of the following:

(i) not a member of a couple;

(ii) member of an illness separated couple;

(iii) member of a respite care couple; and

(b) the person is residing in Australia; and

(c) the person either:

(i) is in Australia; or

(ii) is temporarily absent from Australia and has been so for a continuous period not exceeding 13 weeks.

Method statement

Step 1. Work out what each of the following amounts would have been on 20 September 2009, taking account of indexation (if any) under Division 18 of Part IIIB or Part XII on that day, if the Veterans' Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:

(a) the amount that would be the pension MBR (within the meaning of Division 18 of Part IIIB) for a person who is not a member of a couple assuming that section 59EA did not apply on 20 September 2009;

(b) pension supplement (within the meaning of Division 18 of Part IIIB) for a person who is not (and was not on 1 July 2000) a member of a couple;

(c) PA (service pension) rate (within the meaning of Division 18 of Part IIIB);

(d) the rate of telephone allowance in subsection 118SA(1);

(e) the rate of utilities allowance in section 118OC for a person who is not a member of a couple.

Step 2. Identify the greater of the amount described in paragraph (e) of step 1 and $525.20 (or either of them if they are the same).

Step 3. Add up all the amounts worked out under step 1 and the amount identified under step 2.

Step 4. If the result of step 3 is not a multiple of $2.60, round that result up to the next multiple of $2.60.

Note 1: For member of a couple , illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.

Note 2: Subsection 5G(1A) is relevant to determining whether a person is residing in Australia.

Note 3: Section 59A explains the abbreviations used in Division 18 of Part IIIB.

Partnered Australian resident in Australia

(2) For the purposes of subparagraph 30(4)(a)(i), work out the amount as follows if, on the relevant day:

(a) the person is a member of a couple, but not a member of an illness separated couple or respite care couple; and

(b) the person is residing in Australia; and

(c) the person either:

(i) is in Australia; or

(ii) is temporarily absent from Australia and has been so for a continuous period not exceeding 13 weeks.

Method statement

Step 1. Work out what each of the following amounts would have been on 20 September 2009, taking account of indexation (if any) under Division 18 of Part IIIB or Part XII on that day, if the Veterans' Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:

(a) the amount that would be the pension MBR (within the meaning of Division 18 of Part IIIB) for a member of a couple (other than an illness separated couple or a respite care couple) assuming that section 59EA did not apply on 20 September 2009;

(b) pension supplement (within the meaning of Division 18 of Part IIIB) for a person who is (and was on 1 July 2000) a member of a couple (other than an illness separated couple or a respite care couple);

(c) PA (service pension) rate (within the meaning of Division 18 of Part IIIB);

(d) the rate oftelephone allowance in subsection 118SA(2);

(e) the rate of utilities allowance in section 118OC for a member of a couple (other than an illness separated couple or a respite care couple).

Step 2. Identify the greater of the amount described in paragraph (e) of step 1 and $262.60 (or either of them if they are the same).

Step 3. Add up all the amounts worked out under step 1 and the amount identified under step 2.

Step 4. If the result of step 3 is not a multiple of $2.60, round that result up to the next multiple of $2.60.

Note 1: For member of a couple , illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.

Note 2: Subsection 5G(1A) is relevant to determining whether a person is residing in Australia.

Note 3: Section 59A explains the abbreviations used in Division 18 of Part IIIB.

Single person not covered by subclause (1)

(3) For the purposes of subparagraph 30(4)(a)(i), work out the amount as follows if, on the relevant day:

(a) the person's family situation is any of the following:

(i) not a member of a couple;

(ii) member of an illness separated couple;

(iii) member of a respite care couple; and

(b) the person either:

(i) is not residing in Australia; or

(ii) is absent from Australia and has been so for a continuous period exceeding 13 weeks.

Method statement

Step 1. Work out what each of the following amounts would have been on 20 September 2009, taking account of indexation under Division 18 of Part IIIB on that day, if the Veterans' Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:

(a) the amount that would be the pension MBR (within the meaning of Division 18 of Part IIIB) for a person who is not a member of a couple assuming that section 59EA did not apply on 20 September 2009;

(b) pension supplement (within the meaning of Division 18 of Part IIIB) for a person who is not (and was not on 1 July 2000) a member of a couple.

Step 2. Add up the amounts worked out under step 1.

Note 1: For member of a couple , illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.

Note 2: Subsection 5G(1A) is relevant to determining whether a person is residing in Australia.

Note 3: Section 59A explains the abbreviations used in Division 18 of Part IIIB.

Partnered person not covered by subclause (2)

(4) For the purposes of subparagraph 30(4)(a)(i), work out the amount as follows if, on the relevant day:

(a) the person is a member of a couple, but not a member of an illness separated couple or respite care couple; and

(b) the person either:

(i) is not residing in Australia; or

(ii) is absent from Australia and has been so for a continuous period exceeding 13 weeks.

Method statement

Step 1. Work out what each of the following amounts would have been on 20 September 2009, taking account of indexation under Division 18 of Part IIIB on that day, if the Veterans' Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:

(a) the amount that would be the pension MBR (within the meaning of Division 18 of Part IIIB) for a member of a couple (other than an illness separated couple or a respite care couple) assuming that section 59EA did not apply on 20 September 2009;

(b) pension supplement (within the meaning of Division 18 of Part IIIB) for a person who is (and was on 1 July 2000) a member of a couple (other than an illness separated couple or a respite care couple).

Step 2. Add up the amounts worked out under step 1.

Note 1: For member of a couple , illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.

Note 2: Subsection 5G(1A) is relevant to determining whether a person is residing in Australia.

Note 3: Section 59A explains the abbreviations used in Division 18 of Part IIIB.

32 Amounts affecting transitional rate of income support supplement

Single person's component of maximum basic rate

(1) For the purposes of subparagraph 30(6)(a)(i), work out the amount as follows if, on the relevant day, the person's family situation is:

(a) not a member of a couple; or

(b) member of an illness separated couple; or

(c) member of a respite care couple.

Method statement

Step 1. Work out what each of the following amounts (described using the abbreviation in section 59A for the amount) would have been on 20 September 2009, taking account of indexation (if any) under Division 18 of Part IIIB on that day, if the Veterans' Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:

(a) the amount that would be the pension MBR for a person who is not a member of a couple assuming that section 59EA did not apply on 20 September 2009;

(b) pension supplement for a person who is not (and was not on 1 July 2000) a member of a couple.

Step 2. Add up all the amounts worked out under step 1.

Note: For member of a couple , illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.

Partnered person's component of maximum basic rate

(2) For the purposes of subparagraph 30(6)(a)(i), work out the amount as follows if, on the relevant day, the person is a member of a couple, but not a member of an illness separated couple or respite care couple:

Method statement

Step 1. Work out what each of the following amounts (described using the abbreviation in section 59A for the amount) would have been on 20 September 2009, taking account of indexation (if any) under Division 18 of Part IIIB on that day, if the Veterans' Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:

(a) the amount that would be the pension MBR for a member of a couple (other than an illness separatedcouple or a respite care couple) assuming that section 59EA did not apply on 20 September 2009;

(b) pension supplement for a person who is (and was on 1 July 2000) a member of a couple (other than an illness separated couple or a respite care couple).

Step 2. Add up all the amounts worked out under step 1.

Note: For member of a couple , illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.

Increased rate

(3) For the purposes of paragraph 30(6)(c), work out the amount for the person as follows:

Method statement

Step 1. Work out the ceiling rate for the person (see Module A of the Rate Calculator).

Step 2. Work out the amount per year (if any) for rent assistance for the person (see Module C of the Rate Calculator).

Step 3. Add up the results of steps 1 and 2 and, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, subtract the person's minimum pension supplement amount.

33 Rate of payments to partners of persons affected by clause 30

(1) This clause applies if clause 30 applies to a person who is a member of a couple and that clause affects the rate at which service pension or income support supplement is payable to the person.

(2) In working out the amount of a payment under this Act payable to a partner of the person, assume that the service pension or income support supplement payable to the person is payable at the rate at which it would be payable if clause 30 had not been enacted.

34 Payment and income tax consequences of receiving service pension or income support supplement at rate affected by clause 30

Application

(1) This clause applies if clause 30 affects the rate at which service pension or income support supplement is payable to a person.

Purpose

(2) The purpose of this clause is to ensure that the person is treated appropriately in relation to the payment, and income taxation, of the pension or supplement by modifying the operation of this Act (and thus affecting the related income tax law) in relation to the person and the pension or supplement.

Note: This clause does not modify the operation of subsection 5GA(3), which provides for working out the person's minimum pension supplement amount.

Pension supplement amount

(3) This Act applies in relation to the person's pension or supplement as if each of the following:

(a) the amount described in subparagraph 30(4)(a)(i), as affected by any indexation and any relevant reduction described in paragraph 30(4)(a);

(b) the amount described in subparagraph 30(6)(a)(i), as affected by any indexation and any relevant reduction described in paragraph 30(6)(a);

were an amount worked out and added under the pension supplement Module of the Rate Calculator.

Note 1: One effect of subclause (3) is that whichever of the amounts described in paragraphs (3)(a) and (b) is relevant is the person's pension supplement amount (as defined in subsection 5Q(1) of this Act).

Note 2: If that amount exceeds the person's pension supplement basic amount (as affected by subclause (4)), another effect of subclause (3) is that the excess affects the tax-exempt pension supplement under subsection 5GA(5) of this Act in some cases.

Note 3: Yet another effect of subclause (3) is that clause 4 of Schedule 6 will affect the operation of reductions of the maximum payment rate because of the income test and assets test in some cases.

Pension supplement basic amount

(4) This Act applies in relation to the person's service pension or income support supplement as if:

(a) each reference in the table in subsection 5GA(4) to $509.60 were a reference to $14,903.20; and

(b) the reference in the table in subsection 5GA(4) to $426.40 were a reference to $12,448.80.

Note 1: This affects the person's pension supplement basic amount.

Note 2: The provisions for indexing amounts in the table in subsection 5GA(4) apply to the higher figures mentioned in this subclause.

Part 2   Related amendments

Division 1   Amendments commencing on 20 September 2009

Veterans' Entitlements Act 1986

2   Subpoint SCH6-A1(2) of Schedule 6 (after note 4)

Insert:

Note 4A: Clause 30 of Schedule 5 may affect the provisional payment rate in step 9.

3   Subpoint SCH6-A1(6) of Schedule 6 (after note 4)

Insert:

Note 4A: Clause 30 of Schedule 5 may affect the provisional payment rate in step 10.

Division 2   Amendments commencing on 21 September 2009

Veterans' Entitlements Act 1986

4   Section 59A (at the end of the table)

Add:

5   Subsection 59B(1) (at the end of the table)

Add:

Part 3   Other amendments

Social Security Act 1991

6   Paragraph 146(1)(a) of Schedule 1A

Omit "social security pensions", substitute "payments".

7   Subparagraph 146(1)(a)(vii) of Schedule 1A

Omit "and".

8   At the end of paragraph 146(1)(a) of Schedule 1A

Add:

(viii) service pension (except carer service pension);

(ix) income support supplement; and

9   Paragraph 146(1)(b) of Schedule 1A

Omit "social security pensions", substitute "payments".

10   Subclause 146(2) of Schedule 1A

Omit "those social security pensions", substitute "the social security pensions described in paragraph (1)(a)".

11   At the end of subclause 146(2) of Schedule 1A

Add:

Note: This clause does not make a person entitled to receive a social security pension if the person is not otherwise entitled to receive it.

12   Subclause 146(5) of Schedule 1A

Repeal the subclause, substitute:

Limit on application of subclause (3)

(5) Subclause (3) does not apply for working out the rate of a social security pension of the person for the relevant day if the relevant day is after a day for which one of the following conditions was met:

(a) the amount worked out for the day under subclause (4) (in a previous application of this clause) was less than or equal to the person's provisional annual payment rate, apart from this clause, for a social security pension described in paragraph (1)(a);

(b) the amount worked out for the day under subclause 30(4) of Schedule 5 to the Veterans' Entitlements Act was less than or equal to the person's provisional payment rate for service pension (except carer service pension) apart from clause 30 of that Schedule;

(c) the amount worked out for the day under subclause 30(6) of Schedule 5 to the Veterans' Entitlements Act was less than or equal to the person's provisional payment rate for income support supplement apart from clause 30 of that Schedule.

(5A) However, subclause (5) does not prevent subclause (3) from applying for working out the rate of a social security pension of the person for the relevant day if:

(a) on the relevant day the person is a member of a couple, but not a member of an illness separated couple or respite care couple and not partnered (partner in gaol); and

(b) on each day for which a condition in paragraph (5)(a), (b) or (c) was met, the person was a member of a respite care couple; and

(c) on a day before all the days described in paragraph (b):

(i) the person was a member of a couple, but not a member of an illness separated couple or respite care couple and not partnered (partner in gaol); and

(ii) either subclause (3) affected the rate at which a social security pension was payable to the person or clause 30 of Schedule 5 to the Veterans' Entitlements Act affected the rate at which service pension or income support supplement was payable to the person.

Note: For member of a couple , illness separated couple , respite care couple and partnered (partner in gaol) see section 4.

Schedule 10   Pension age for persons other than veterans

Veterans' Entitlements Act 1986

1   Subsection 5QB(2)

Repeal the subsection, substitute:

Men

(2) A man born during the period specified in column 2 of an item in the following table reaches pension age when he turns the age specified in column 3 of that item.

2   Subsection 5QB(5)

Repeal the subsection, substitute:

(5) A woman born during the period specified in column 2 of an item in the following table reaches pension age when she turns the age specified in column 3 of that item.

Schedule 11   Advance payments

Veterans' Entitlements Act 1986

1   Section 5 (index of definitions)

Insert the following entry in its appropriate alphabetical position, as determined on a letter-by-letter basis:

2   Subsection 5Q(1)

Insert:

advance payment eligible amount , for a person, means:

(a) if the person is receiving a service pension worked out under subpoint SCH6-A1(2) of Schedule 6 - the sum of the following amounts:

(i) the person's maximum basic rate;

(ii) the amount (if any) by which the person's pension supplement amount exceeds the person's minimum pension supplement amount; or

(b) otherwise - the result of paragraph (a) worked out as if the person were receiving a service pension worked out under subpoint SCH6-A1(2) of Schedule 6.

3   Paragraph 79B(1)(b)

After "advance payment", insert "is made".

4   Subsection 79B(2)

Repeal the subsection, substitute:

(2) A person is not eligible for an advance payment if:

(a) the maximum amount of advance payment to which the person would be entitled under Division 5 is less than 1/52 of the person's advance payment eligible amount; or

(b) the amount of an advance payment of:

(i) pension; or

(ii) a social security entitlement under Part 2.22 of the Social Security Act;

that the person received in full (whether as a single lump sum or in instalments) more than 12 months ago has not been fully repaid; or

(c) the person owes a debt to the Commonwealth under section 205 or 205A.

The amount worked out under paragraph (a) must be rounded to the nearest cent (rounding 0.5 cents upwards).

Note 1: Paragraph (a) does not prevent payment of an advance payment in instalments of less than the amount worked out under that paragraph.

Note 2: For advance payment eligible amount , see subsection 5Q(1).

5   Division 5 of Part IVA

Repeal the Division, substitute:

Division 5 - Amount of advance payment

79K Amount of advance payment

(1) The amount of an advance payment of pension is the smaller of the following amounts:

(a) the amount of advance payment sought;

(b) the maximum amount of advance payment payable to the person as worked out as follows:

Method statement

Step 1. Work out 3/52 of the person's advance payment eligible amount.

Step 2. Work out the annual rate at which pension was payable to the person on the last payday before the application for the advance payment was made, disregarding:

(a) any amount payable by way of remote area allowance; and

(b) so much of the person's pension supplement amount (if any) as is equal to the person's minimum pension supplement amount.

Step 3. Work out the smaller of the result of step 1 and:

(a) if the pension is a service pension or income support supplement - 7.5% of the result of step 2; and

(b) otherwise - 13 times the fortnightly rate of pension payable to the person.

Step 4. Subtract the following from the result of step 3:

(a) each advance payment (if any) of pension paid to the person during any of the 13 fortnights immediately before the application for the current advance payment was made;

(b) each other advance payment (if any) of pension paid to the person that has not been fully repaid.

Step 5. The result of step 4 (rounded to the nearest cent (rounding 0.5 cents upwards)) is the maximum amount of advance payment payable to the person.

Note 1: The amount of the advance payment will be more than the minimum eligible amount for the person (see paragraph 79B(2)(a)).

Note 2: For advance payment eligible amount , see subsection 5Q(1).

6   Application

The amendments made by this Schedule apply in relation to applications for advance payment made on or after 1 July 2010.

Schedule 12   Amendments relating to aged care

Aged Care Act 1997

1   Paragraph 44-24(2)(a)

After "pension", insert "reduced by the amount worked out under subsection 5GA(3) of the Veterans' Entitlements Act 1986 to be the care recipient's minimum pension supplement amount".

2   Paragraph 44-24(3)(a)

After "supplement", insert "reduced by the amount worked out under subsection 5GA(3) of the Veterans' Entitlements Act 1986 to be the care recipient's minimum pension supplement amount".

3   Paragraph 44-24(4)(a)

After "payment", insert "reduced by, if the payment is an income support payment within the meaning of subsection 23(1) of the Social Security Act 1991, the amount worked out under subsection 20A(4) of that Act to be the care recipient's minimum pension supplement amount".

4   After subsection 44-24(4)

Insert:

(4A) However, the reduction referred to in paragraph (4)(a) does not apply if:

(a) the care recipient's income support payment is special benefit or youth allowance under the Social Security Act 1991; or

(b) the care recipient has not reached pension age (within the meaning of subsections 23(5A), (5B), (5C) and (5D) of that Act) and the rate of the care recipient's income support payment is worked out in accordance with the Rate Calculator at the end of section 1066A, 1067L, 1068, 1068A or 1068B of that Act.

5   Application

The amendments made by this Schedule apply in relation to the calculation of the total assessable income for a care recipient under section 44-24 of the Aged Care Act 1997 for the purposes of working out the daily income tested reduction in respect of the care recipient for a day that is on or after 20 September 2009.